The Income Tax Appellate Tribunal (ITAT), Cochin bench has held that the provision regarding the filing of audit report along with the return of income is only directory and not mandatory under the Income Tax Act, 1961.
The return originally filed by the assessee was revised for claiming deduction u/s 10A of the Income Tax Act. Similarly, for the assessment year 2011-2012, the claim u/s 10A of the Income Tax Act was made before the first appellate authority and Form No.56F was submitted.
The CIT(A), on the first appeal, held that he cannot entertain the claim u/s 10A, which was not raised before the Assessing Authority. According to him, the said claim was not emanating from the assessment as the restriction to entertain an alternate new claim except through filing a revised return is applicable only to the assessing authority and not to the appellate authorities.
The Tribunal, after hearing both sides, observed that the CBDT Circular No.14 dated 11.04.1955 has clarified that the revenue shall not take advantage of the ignorance of the assessee and the A.O. shall assist the taxpayer for claiming of his legitimate allowance/disallowance.
“As mentioned earlier, deduction u/s 10B and 10A of the I.T.Act is Pari Materia. When claim u/s 10B of the I.T.Act was denied, the assessee made alternative claim u/s 10A of the I.T.Act. The alternative claim of deduction u/s 10A of the I.T.Act was not considered by the A.O. nor the CIT(A). In the interest of justice and equity, the issue of claim of deduction u/s 10A of the I.T.Act is restored to the A.O. The A.O. shall examine whether the assessee has satisfied the conditions mentioned for claiming deduction u/s 10A of the I.T.Act and accordingly grant deduction,” the Tribunal said.
Allowing the plea of the assessee, the Tribunal held that “the assessee had filed audit report in Form No.56F for claiming the alternative claim of deduction u/s 10A of the I.T.Act. The provision regarding the filing of audit report along with the return of income is only directory and not mandatory.”Subscribe Taxscan AdFree to view the Judgment